Amid intelligence inputs that militant groups are getting money into the country in small amounts through part-time foreign exchange bureaux, the government is now planning to carry out a crackdown on them and streamline the money arriving from abroad.
The move comes close on the heels of objections raised by the security agencies over the mushrooming of foreign exchange bureaux at every nook and corner of the country, to which Reserve Bank of India (RBI) officials expressed their ignorance.
At a recent meeting, the law enforcement and security agencies had raised serious concerns at the mushrooming of money transfer agencies, especially an international money transfer company which has its agents in almost every street, official sources said.
The RBI officials had informed the meeting that permission had been given to the company to have agents and sub-agents like banks, post offices and important financial institutions. However, they were unable to give an explanation when questions were raised about the appointment of “sub-sub agents” like grocery shop-owners and travel agents.
This prompted the RBI to issue guidelines to every bank seeking an up-to-date list of all offices and branches, which were authorised to transact foreign exchange business and details of any change in categorisation of its branches dealing in foreign exchange.
Now, this move is being seen as a prelude to streamline the mushrooming of foreign exchange bureaux that have opened up at every nook and corner of the country.

Legal problems
The security agencies have also expressed their reservations on the Prevention of Money Laundering (PMLA) Act, saying its implementation is lengthy, time-consuming and not beneficial in curbing financial transactions by militants as it does not cover proceeds from terrorist acts.